Norton Oil closure strands customers

Phillipsburg company served parts of Lehigh Valley.

Harold Kirkhuff of Bethlehem should have come out ahead in the annual gamble to get the best price on heating oil.

He prepaid for oil over the summer, locking in 2,000 gallons at $3.09 a gallon. With the price now upward of $3.50 a gallon, Kirkhuff should be happy he doesn't have to pay the going rate.

But he's not happy because he'll have to pay the going rate after all. The company he prepaid for oil — Norton Oil Co. of Phillipsburg — closed abruptly a few weeks ago, taking with it the money from prepaying customers like Kirkhuff.

"It just ticks me off," said Kirkhuff, who had bought the oil for a building he owns in Palmer Township. "I never got stung like this."

He's not the only one feeling stung. About 230 complaints have been filed with state and county authorities. Some are from Northampton County residents.

Norton Oil is telling customers in a letter that there will be no cash refunds.

Customers should look elsewhere to ensure they have enough oil to heat their homes, said Michael Santos, superintendent of the weights and measures office in Warren County, N.J., which has received about 200 complaints.

"If people are waiting for Norton to deliver or to have somebody step in to honor their contracts or their credits, forget it," Santos advised. "Nobody is coming from Norton."

Charles Laputka, an attorney for the company, confirmed that.

He told me the business will not be reopening. He wouldn't tell me why it closed, citing a review underway by the New Jersey Division of Consumer Affairs, which told me it has received 31 complaints. Laputka said Norton provided the office with records it requested.

Messages on Norton Oil's website and answering machine refer customers to Four Points Oil Co., but caution that their prepaid contracts won't be honored.

"Please note Four Points Oil Co. did not buy Norton Oil Co. or assume any liability for money owed to budget or pre-buy customers," said a message on the company's answering machine Tuesday.

Norton's president is Richard Norton of Palmer, according to New Jersey business records. He did not return my call. My call and email to the business also were not returned.

Santos told me about 500 customers are affected. Laputka said many of the customers who have credits with Norton are owed minimal amounts, rebates of less than $20, but he could not provide me with exact figures.

Kirkhuff is owed plenty.

He said he received only one delivery from his prepaid amount and is owed about $5,000.

Kirkhuff bought the oil for a property he owns in Palmer where he has a barber shop and apartments. He's close to needing more oil and has been quoted a price of $3.55 a gallon.

He also had two service contracts, which cost him an additional $700, for Norton to maintain the two furnaces in the building. He said he's found a new company willing to honor those contracts.

Norton Oil had been in business since 1939, according to its website. The company served the Bangor, Bath, Bethlehem, Easton, Hellertown, Martins Creek, Nazareth, Raubsville, Riegelsville, Roseto, Stockertown, Tatamy and Upper Mount Bethel areas in addition to many communities in New Jersey, according to its website.

"I just can't believe the people who ran such a great business and provided such a useful and good service could let so many people down," Santos said.

Laputka told me that Norton is sending letters to its customers, but not all customers have received them yet because they are going out in batches so as to not overwhelm Four Points Oil, which the letters refer customers to contact.

Santos gave me a copy of a letter, dated Nov. 27 and signed by Richard Norton, that says "unfortunately, a cash refund is not an option."

The letter says the company "has been forced to close its doors" but provides no further explanation.

Santos described the sudden closure as "reprehensible" and said it has hit senior citizens on fixed incomes hard, including some who bought oil from Norton using government heating assistance payments.

"These are the people who can least afford this type of thing," Santos said.

He fears some Norton customers may not even know about the closing, as they haven't all been notified yet, and is asking people who know Norton customers to make sure they know Norton is out of business.

"They are not going to know that their company is not going to honor their payments until the heater stops or until they get something in the mail," Santos said.

His office is informing customers about what's going on and answering questions. It's referring them to the Division of Consumer Affairs, because the closure and stranding of customers is a contractual issue beyond the regulatory authority of the weights and measures department. The department ensured Norton Oil's delivery trucks were properly calibrated and customers were getting the correct amount of fuel.

Kirkhuff said he intends to file a complaint with the Division of Consumer Affairs. He's waiting for the forms in the mail.

You can reach the weights and measures office at 908-453-2828 and the Division of Consumer Affairs at 973-504-6200.

You can try to protect yourself against situations like this by prepaying for oil with a credit card, as you may be able to dispute the charge through your bank if the oil company folds. Customers also can pursue refunds through small claims court, though that comes with filing fees and no guarantee you'll prevail.

The Watchdog is published Thursdays and Sundays. Contact me at watchdog@mcall.com, 610-841-2364 or The Morning Call, 101 N. Sixth St., Allentown, PA, 18101. I'm on Twitter @mcwatchdog and Facebook at Morning Call Watchdog.